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on International Trade |
| By: | Kyle Handley; Fariha Kamal; Ryan Monarch |
| Abstract: | We use the 2018-2019 U.S. trade war to examine how supply chains adjustments to a tariff cost shock affect imports and exports. Using confidential firm-trade linked data, we show that the decline in imports of tariffed goods was driven by discontinuations of U.S. buyer–foreign supplier relationships, reduced formation of new relationships, and exits by U.S. firms from import markets altogether. However, tariffed products where imports were concentrated in fewer suppliers had a smaller decline in import growth. We then construct measures of export exposure to import tariffs by linking tariffs paid by importing firms to their exported products. We find that the most exposed products had lower exports in 2018-2019, with most of the impact occurring in 2019. |
| Keywords: | global supply chains; strategic products; tariffs; trade war |
| JEL: | F1 F13 F14 F23 H2 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:24-43 |
| By: | Samuel Moore; Ana Maria Santacreu |
| Abstract: | An analysis of 'geopolitical distance' and exports highlights the links between geopolitical alignment and access to U.S. technology and goods. |
| Keywords: | geopolitics; exports; technology; trade |
| Date: | 2024–09–03 |
| URL: | https://d.repec.org/n?u=RePEc:fip:l00001:98778 |
| By: | Felbermayr, Gabriel; Peterson, Sonja; Wanner, Joschka |
| Abstract: | While international trade can offer gains from specialization and access to a wider range of products, it is also closely interlinked with global environmental problems, above all, anthropogenic climate change. This survey provides a structured overview of the economic literature on the interaction between environmental outcomes, trade, environmental policy and trade policy. In this endeavor, it covers approaches reaching from descriptive data analysis based on input‐output tables, over quantitative trade models and econometric studies to game‐theoretic analyses. Addressed issues are in particular the emission content of trade and emissions along value chains, the relocation of dirty firms and environmental impacts abroad, impacts of specific trade policies (such as trade agreements or tariffs) or environmental policies (such as border carbon adjustment), transportation emissions, as well as the role of firms. Across the different topics covered, the paper also tries to identify avenues for future research, with a particular focus on extending quantitative trade and environment models. |
| Keywords: | carbon border adjustment, carbon leakage, climate change, trade, trade policy |
| JEL: | F13 F18 Q54 Q58 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:302108 |
| By: | Gilles Paché (CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon) |
| Abstract: | It is now widely recognized that geopolitical tensions disrupt global supply chains, complicating trade flows and increasing the risk associated with logistics operations. The South China Sea, a strategic and disputed region of the world, is a perfect illustration of the stakes involved in these disruptions. Situated between several Asian countries, the region is crucial to world trade, but is subject to territorial conflicts, notably between China and Taiwan. Its increasing militarization and abundance of natural resources exacerbate geopolitical tensions, given that the South China Sea is vital for the transportation of goods, linking Asian, European and American markets. My speculative paper looks at the possible collapse of certain global value chains under the pressure of geopolitical tensions, leading to the emergence of a logistically multipolar planet. |
| Keywords: | Economic history, Geopolitics, Global supply chains, Logistical disruptions, South China Sea, Territorial disputes, Economic history Geopolitics Global supply chains Logistical disruptions South China Sea Territorial disputes |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04683314 |
| By: | Jose Asturias; Marco Sanfilippo; Asha Sundaram |
| Abstract: | We study the impact of FDI on domestic welfare using a model of internal trade with variable markups that incorporates intranational transport costs. The model allows us to disentangle the various channels through which FDI affects welfare. We apply the model to the case of Ethiopian manufacturing, which received considerable amounts of FDI during our study period. We find substantial gains from the presence of foreign firms, both in the local market and in other connected markets in the country. FDI, however, resulted in a modest worsening of allocative efficiency because foreign firms tend to have significantly higher markups than domestic firms. We report consistent findings from our empirical analysis, which utilises microdata on manufacturing firms, information on FDI projects, and geospatial data on improvements in the road network. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:24-45 |
| By: | Merchán Álvarez, Federico Alberto |
| Abstract: | This paper uses a sample of the biggest private Colombian exporting firms to propose and estimate a two‐step methodology for measuring international managerial skill and calculating its impact on international firm performance. The first step quantifies the managerial team's organisational capital contribution to rise firms' export proficiency through the average of a regression residuals group conformed by export unit value residuals for differentiated products (multiplying by −1 the price competition products' residuals) and export quantity residuals for homogeneous products. The second step results indicate that: (i) international managerial quality has a significant and robust positive effect on export value, (ii) better managers in the international market do not increase the number of products exported but upgrade export basket's quality and (iii) export value elasticity relative to international managerial quality is around 5 times larger than export value elasticity relative to exogenous global demand shocks. |
| Keywords: | exporting, firm's performance, international experience, management practices, quality versus price competition |
| JEL: | F23 F10 M11 M12 L25 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:302044 |
| By: | Gimenez-Perales, Victor |
| Abstract: | This paper studies the dynamics of importer–exporter connections when importers source inputs from multiple exporters. I first develop a trade model in which heterogeneous importers invest in expanding the set of potential exporters they know and from which they can source. The model delivers three novel predictions. The lower the degree of substitutability among final goods and the higher the degree of substitutability among inputs of an importer: (i) the lower the growth rate in importer’s connections, (ii) the more likely are connections to be discontinued, and (iii) the lower the trade value growth per surviving connection. I then provide evidence in favor of these predictions by using customs transaction data from Colombia. Finally, I show that the mechanism unveiled in this paper matters for the heterogeneity of the trade adjustment to macroeconomic shocks across sectors. |
| Keywords: | Importers, Survival, Connections, Dynamic model |
| JEL: | D21 F10 F14 F23 L14 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:302106 |
| By: | Krieger, Bastian |
| Abstract: | The access to foreign knowledge via service imports fosters the success of innovations in Germany. The probability of firms in- troducing new or significantly improved products, services, or processes is more than twice as high for those that import knowl- edge services than for non-importers (68 per cent vs. 33 per cent). Furthermore, knowledge importers experience a greater av- erage percentage reduction in their unit costs due to new processes (three per cent vs. one per cent), and a larger revenue share from new products and services (18 per cent vs. eight per cent). Over the course of the previous decade, Germany witnessed a notable surge in the importation of knowledge services, with the value of such imports more than doubling from $16, 949 million in 2010 to $46, 392 million in 2022. Moreover, Germany's focus on the European Union as a trade partner significantly increased. The European Union's share of Germany's total imports of knowledge services rose from 35 per cent in 2010 to 44 per cent in 2019. This trend follows the proposed strategy of the German Federal Ministry of Education and Research (BMBF) to focus on a specific selection of countries as knowledge sources to enhance Germany's technological sovereignty and resilience to global challeng- es. However, to compensate for rising protectionism worldwide, trade barriers between Germany and its selected countries - in particular the EU single market - have the potential to be further reduced. |
| Keywords: | Innovation, trade in services, knowledge, service, import, Germany |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewpbs:302801 |
| By: | Flach, Lisandra; Heiland, Inga; Larch, Mario; Steininger, Marina; Teti, Feodora A. |
| Abstract: | This paper evaluates the effects of sanctions on Russia between 2014 and 2019 and the resulting countersanctions. We estimate their impact on trade in a gravity framework, allowing for treatment heterogeneity among pairs and sectors, and use the estimated elasticities in a general equilibrium analysis. We find that the sanctions decreased trade with Russia in key sectors, translating to a loss in real income in Russia by 0.3%. Full decoupling of the EU and its allies from Russia would increase this effect to over 4%. Our results emphasize the role of deep sanctions as a foreign policy instrument and international cooperation. |
| Keywords: | general equilibrium, sanctions, structural gravity, treatment heterogeneity |
| JEL: | F1 F13 F14 F5 F51 H5 N4 |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:302103 |
| By: | Caceres Bustamante, Javiera; Delev, Christian |
| Abstract: | The European Union (EU) is renegotiating its trade agreements with Latin American States. The core objective of this process is to modernize the Trade and Sustainable Development (TSD) chapters of these agreements. As such, this article critically examines the prospects of the modernized TSD chapters in the Chile-EU Association Agreement and the EU-Mexico Global Agreement, drawing lessons for the potential amendment of the EU-Andes Agreement. For this purpose, the article addresses the modernization process of the EU-Chile Association Agreement by surveying Chile’s negotiating practice in incorporating environment and climate change-related provisions in trade agreements. It compares the evolution of these provisions within the EU’s practice and discusses the convergence or divergence of views that have shaped the existing agreement. Additionally, it explores the possible future review process of the TSD chapter in the agreement. Furthermore, the article discusses the ongoing renegotiating process of the Global Agreement between the EU and Mexico. It examines the opportunity to enhance the current environmental protection disciplines in this agreement. Finally, the article evaluates how these experiences can inform a future renegotiation of the EU-Andes Agreement, with a focus on prioritising the Parties’ nationally determined contributions (NDCs) under the Paris Agreement. |
| Keywords: | environmental commitments; EU-Andes; EU-Chile; EU-Mexico; Free Trade Agreements; sustainable development; trade; AAM requested |
| JEL: | L81 J1 |
| Date: | 2023–08–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:123563 |
| By: | Larch, Mario; Wanner, Joschka |
| Abstract: | International cooperation is at the core of multilateral climate policy. How is its effectiveness harmed by individual countries not participating in the global mitigation effort? We use a multi-sector structural trade model with carbon emissions from production and a constant elasticity of fossil fuel supply function to simulate the consequences of unilateral non-participation in the Paris Agreement. Taking into account both direct and leakage effects, we find that non-participation of the US would eliminate more than a third of the world emissions reduction (31.8% direct effect and 6.4% leakage effect), while a potential non-participation of China lowers the world emission reduction by 24.1% (11.9% direct effect and 12.2% leakage effect). The substantial leakage is primarily driven by technique effects induced by falling international fossil fuel prices. In terms of welfare, the overwhelming majority of countries gain from the implementation of the Paris Agreement and most countries have only very little to gain from unilaterally deciding not to participate. |
| Keywords: | Climate change, International trade, Carbon leakage, Fossil fuel supply |
| JEL: | F14 F18 Q56 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:302105 |
| By: | Sara Calligaris; Chiara Criscuolo; Josh De Lyon; Andrea Greppi; Oliviero Pallanch |
| Abstract: | This paper develops a taxonomy of 151 industries, mainly defined at the 3-digit level, indicating at which geographical level competition takes place. It classifies 40 industries as competing at the domestic level, 85 at the European level, and 26 at the global level. First, this paper creates a novel dataset that combines production and international trade data for both goods and services industries, defined at a detailed level of industry aggregation for 15 European countries (based on data availability). Then, by comparing domestic sales with international trade flows, and their source/destination, it identifies the geographic level of competition of each industry. The proposed classification can be used in numerous applications, from the design of trade policies to the assessment of competition by antitrust authorities. The paper shows that the taxonomy is broadly consistent with external data sources that provide alternative ways of inferring the degree of internationalisation of each industry. |
| Keywords: | Competition, International Trade, Market Boundaries, Trade Costs |
| JEL: | F14 F60 L11 |
| Date: | 2024–09–13 |
| URL: | https://d.repec.org/n?u=RePEc:oec:stiaaa:2024/05-en |
| By: | Costa, Rui; Dhingra, Swati; Machin, Stephen |
| Abstract: | This paper studies consequences of the large exchange rate depreciation occurring when the UK electorate unexpectedly voted to leave the European Union. Sterling plummeted, recording the biggest one-day depreciation of any of the world's four major currencies since Bretton Woods. The prospect of Brexit happening generated sizable differences in how much sterling depreciated against different currencies. Coupled with pre-referendum cross-country trade patterns, this generated variations in exchange rates facing businesses in different industries. The paper offers evidence of a cost shock from the prices of intermediate imports rising by more in higher depreciation industries, but with no revenue offset from exports. Workers were impacted by these increased cost pressures, not in terms of job loss but through relative real wage declines in higher depreciation, larger cost shock industries. This resulted in an aggregate fall in real wage growth of 3 to 3.6% cumulatively over the three years after the referendum. |
| Keywords: | Brexit; exchange rate depreciation; trade prices; Labour outcomes |
| JEL: | J1 |
| Date: | 2024–11–30 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:124542 |
| By: | Mishra, Siddharth |
| Abstract: | Nearly two years after the onset of the conflict in Ukraine, this report provides a comprehensive overview of the current state of the Russian economy. The focus lies on fiscal conditions, external balances, and the impact of Western sanctions on Russia’s trade relations with the European Union and select third countries. Despite heavy military expenditures, Russia managed to keep last year’s fiscal deficit in check. The primary source of coverage was the sovereign National Welfare Fund. Notably, EU exports of economically critical (EC) goods and common high-priority (CHP) items to Russia have virtually ceased due to the effectiveness of the sanctions in preventing direct exports. However, third countries—such as China, Hong Kong, Turkey, and the Commonwealth of Independent States (CIS)—have stepped in and increased their market share. These countries now serve as Russia’s primary suppliers for missing EC goods and CHP items. Our findings indicate a significant likelihood of sanctions evasion through CIS countries like Armenia, Kazakhstan, Uzbekistan, and Kyrgyzstan. Although the evasion is less pronounced via Turkey and China, it remains a notable concern. |
| Keywords: | sovereign fund, common high priority items, trade sanctions, sanctions evasion, economically critically goods, energy sanctions |
| JEL: | F1 F3 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121859 |
| By: | Görg, Holger; Lehr, Jakob |
| Abstract: | This paper, for the first time, investigates the impact of foreign acquisitions on German manufacturing firms using, newly available unique administrative micro data spanning 25 years. Based on an event study design combined with propensity score matching techniques, we find that foreign acquisitions significantly increase labor productivity and average wages in acquired firms. A reduction in employment drives both effects. |
| Keywords: | Foreign direct investment, Foreign acquisitions, Firm behavior, Ex-post evaluation |
| JEL: | F23 F61 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:302104 |
| By: | Lanati, Mauro; Thiele, Rainer |
| Abstract: | Tackling the root causes of migration from developing countries through development cooperation has been suggested as an essential part of the policy mix in OECD migrant destinations. This is even though the evidence on whether economic development leads to more or less people emigrating is so far inconclusive. We investigate the relationship between income per capita and emigration to OECD countries separately for three different skill groups—low‐skilled, medium‐skilled and high‐skilled emigrants—being the first to employ panel regression approaches that account for cross‐country heterogeneity and cover a policy‐relevant time frame of about 5 years. Our findings reveal a universal negative association between income per capita and emigration for all three skill groups and for different income thresholds. This implies that policy makers should not be too concerned about potential trade‐offs between (successful) development cooperation and immigration management, at least in the short to medium run that our analysis covers. At the same time, the scope for using development cooperation as a migration policy instrument can be considered to be limited given the modest size of the estimated income effect: Taking our point estimates at face value, a 10% rise in GDP per capita would on average lead to about 3600 fewer immigrants per destination. |
| Keywords: | Economic Development, Migrants’ Skill Composition, Migration |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkie:302107 |
| By: | Kalaitzi, Athanasia |
| Abstract: | This study examines the causality between basic, technology-intensive, and differentiated manufacturing exports and economic growth in Kuwait using data from 1970 to 2021 and two augmented production function models: one with natural resource exports (Model 1) and the other without on both sides of the model (Model 2). The Johansen cointegration and the autoregressive distributed lag model (ARDL) bound tests are conducted to examine the long-run relationship between the variables. In addition, the Granger causality test in a vector autoregressive framework (VAR) and the Toda–Yamamoto test are employed to explore the directions of the short- and long-run causality between variables, respectively. The empirical results of Model 1 indicate that neither of the decomposed manufacturing exports directly causes economic growth in the short or long run at any conventional significance level, whereas natural resource exports cause economic growth, basic and technology-intensive manufactured exports in the short-run at the 5% level. Model 2 estimations confirm the absence of direct causality between decomposed manufacturing exports and economic growth, whereas a long-run causality runs from output net of natural resource exports to basic manufactured exports at the 10% level. Both model estimations indicate that all the variables jointly cause economic growth and basic manufactured exports in the short and long run, directly or indirectly through imports, confirming the existence of a circular causation. These findings can serve as the basis for designing specific export–import policies to foster diversification and a sustainable economic growth in line with Kuwait’s Vision 2035. |
| Keywords: | causality; Kuwait; manufactured exports; natural resource exports; Springer deal |
| JEL: | N0 R14 J01 |
| Date: | 2024–10–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:124521 |
| By: | Beckmann, Joscha; Czudaj, Robert L.; Murach, Michael |
| Abstract: | The objective of this paper is to analyze the macroeconomic effects of media coverage related to the trade conflict between China and the U.S. for selected countries of the European Union. Our main aim is to evaluate whether media coverage constitutes a relevant transmission channel for macroeconomic effects. We evaluate the response of survey-based macroeconomic expectations, stock prices, and realized industrial production. Our analysis focuses on Germany, France, Italy, and Spain in order to allow for heterogeneous effects across major EU countries. We find significant effects on expectations, stock prices, and industrial production. Especially, a significantly negative effect on current account expectations is observed for three of the four considered EU countries (Germany, Italy, and Spain). |
| Keywords: | China, Current account, EU, Expectations, Trade war |
| JEL: | F32 F41 F43 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121751 |
| By: | Junko Shimizu (Faculty of Economics, Gakushuin University, Japan / Policy Research Institute, Ministry of Finance, Japan); Kiyotaka Sato (Department of Economics, Yokohama National University, Japan / Policy Research Institute, Ministry of Finance, Japan); Takatoshi Ito (School of International and Public Affairs, Columbia University, USA / NBER / National Graduate Institute for Policy Studies, Japan); Yushi Yoshida (Faculty of Economics, Shiga University, Japan / Policy Research Institute, Ministry of Finance, Japan); Taiyo Yoshimi (DFaculty of Economics, Chuo University, Japan / Policy Research Institute, Ministry of Finance, Japan); Uraku Yoshimoto (Policy Research Institute, Ministry of Finance, Japan) |
| Abstract: | In this study, we use microdata from Japanese customs declarations and calculate semiannual invoice currency shares by country, both on a value and transaction basis. From country-level data, we can confirm the following: First, the impression that Japan’s trade is biased toward the U.S. dollar (USD) is mainly due to choices in the U.S., China, and resource-rich countries with large trade volumes. Second, the yen invoicing is selected on a value basis and an even larger transaction number basis, and the local currency invoicing is also used on a bilateral country basis. Third, the choice of invoice currency has changed in recent years. From 2014 to 2020, the USD lost the most shares, falling in 23 of the 34 countries. By conducting an empirical analysis exploring the determinants of invoice currency, our main findings confirm that the intermediate goods trade share has the effect of reducing Yen and increasing USD invoicing in export, while the higher the inflation gap, the more likely one is to use USD invoicing, which suggests that Japanese firms will be further exposed to foreign exchange risk in the future. |
| Keywords: | Invoice currency share, Customs data, Trading partner |
| JEL: | F23 F31 F33 |
| URL: | https://d.repec.org/n?u=RePEc:mof:wpaper:ron374 |
| By: | Clemens, Michael A. (George Mason University); Neufeld, Jeremy (George Mason University); Nice, Amy M. (Cornell University) |
| Abstract: | We examine a little-known restriction on high-skill immigration to the United States, the Exchange Visitor Skills List. This List mandates that to become eligible for long-term status in the U.S., certain high-skill visitors must reside in their home countries for two years after participation in the Exchange Visitor Program on a J-1 visa. While well-intended to prevent draining developing nations of needed skills, today the Skills List in practice is outdated and misdirected. It is outdated because it fails to reflect modern economic research on the complex effects of skilled migration on overseas development. It is misdirected because, as we show, the stringency of the List bears an erratic and even counterproductive relationship to the development level of the targeted countries. The List is also opaque: there have been no public estimates of exactly how many high-skill visitors are subject to the list. We provide the first such estimates. Over the last decade, an average of between 35, 000 and 44, 000 high-skill visitors per year have been covered by the home residency requirement via the Skills List. Despite the stated purpose of the List, these restrictions fall more heavily on relatively advanced economies than on the poorest countries. We describe how a proposed revision to the List can address all three of these concerns, balancing the national interest with evidence-based support for overseas development. |
| Keywords: | migration, skill, human capital, talent, restrictions, barriers, visa, policy, brain drain, brain gain, development, migration, immigration, innovation, research, science |
| JEL: | F22 J24 O15 O33 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izapps:pp214 |
| By: | Tomas Boukal (Institute of Economic Studies, Charles University, Prague, Czech Republic) |
| Abstract: | Multinational enterprises are increasingly using offshore locations to pay lower taxes on their profits. This behavior has distortive effects on the global economy, as the concentration of multinational activities mirrors global tax patterns. In this paper, I exploit the OECD country-by-country reporting statistics to analyze the determinants behind the location of profits. I find that profit allocation is sensitive to both effective tax rates and geographical proximity, confirming the significance of these factors in MNEs´ tax planning strategies. Building on the work of Dharmapala and Hines (2009), this study also uncovers that MNEs are more likely to report profits to jurisdictions with superior governance quality, integrating both Global Governance Indicators and factors linked to financial secrecy. However, the findings indicate that tax haven jurisdictions exhibit a degree of reluctance when it comes to implementing recently introduced policies aimed at combating corruption and tax abuses. |
| Keywords: | international taxation, tax havens, country-by-country reporting, gravity models, governance quality |
| JEL: | F23 G15 G28 H26 H32 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:fau:wpaper:wp2024_31 |
| By: | Callahan, William A. |
| Abstract: | While many use rational IR theory to explain Chinese foreign policy behavior, this paper follows global IR to employ interpretivist theory to examine how Chinese elites understand their country's role in the world. In particular, it explores the Chinese global order ideas of socialism, tradition, and nation through a comparative analysis of how they work in China-Russia relations, especially after China's 20th Communist Party Congress in 2022. The first section presents a critical analysis of the realist understanding of the China-Russia-U.S. strategic triangle. It argues that the socialist concept of "united front work"better explains Chinese (and Russian) policy in terms of short-term "tactical triangles."To probe China's long-term global order ideas, the second section explores narratives of tradition to examine the concentric circles model of global order seen in Chinese tianxia and Russian Eurasianism. To understand these competing Russocentric and Sinocentric global orders, the third section explores how each country's official historiography highlights narratives of the nation and especially how national rejuvenation requires correcting the "national humiliation"of lost territories. Rather than see these narratives in a linear chronological history - i.e., from tradition to socialism to nationalism - this paper considers how they overlap in socialism, tradition, and nation, a non-linear dynamic triad of global order ideas. It concludes first that further research is necessary to examine the interrelation of these three narratives: while nation and tradition are often employed to support the overarching narrative of socialism in recent years, this could certainly change. The conclusion then argues that while these narratives may be coherent theoretically, they have not been very successful in achieving Beijing and Moscow's foreign policy objectives. |
| Keywords: | China; interpretivism; global order; socialism; foreign affairs; Russia |
| JEL: | B14 B24 P2 P3 |
| Date: | 2023–06–29 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:124884 |
| By: | Ernest Liu (Princeton University); Vladimir Smirnyagin (University of Virginia); Aleh Tsyvinski (Yale University) |
| Abstract: | We empirically and quantitatively study the impact of supply chain disruptions on U.S. businesses. Leveraging granular shipment- level data on the universe of U.S. seaborne imports with nearly 200 million observations, we construct a measure of disruptions at the individual firm level for the time period 2013-2023. We document a significant heterogeneity in disruption rates among U.S. public firms, with a notable increase observed in recent years. We introduce a notion of supplier capital and investigate the effect of supply disruptions on firms’ investment decisions. In the data, firms tend to increase investment in supplier capital following the shock, however, financially distressed firms exhibit a much weaker response. We develop a general equilibrium model with heterogeneous firms and with investment in supplier capital. We show that firms’ ability to accumulate supplier capital by making costly investment is an important margin of adjustment in the aftermath of such crises. Financial constraints help account for the heterogeneous treatment effect observed in the data. Two supply chain initiatives proposed by the U.S. government to mitigate disruptions are evaluated. Finally, we document a significant rise in supply disruptions in sectors critical to the U.S. economy and build an index of critical supply disruptions. We show quantitatively that firms relying heavily on imports of critical products experience a much larger decline in output following a disruption shock relative to firms which are not engaged in critical supply chains. |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:cwl:cwldpp:2402 |
| By: | Taiyo Yoshimi; Uraku Yoshimoto; Takatoshi Ito; Kiyotaka Sato; Junko Shimizu; Yushi Yoshida |
| Abstract: | This study utilizes the granular Japanese customs data from 2014 to 2020 to examine the exchange rate pass-through (ERPT) to Japanese import prices. It mainly focuses on the impact of the invoicing currency choice on ERPT. The ERPT elasticity in products invoiced in the exporter’s currency is greater than those invoiced in yen. In the full sample analysis, the ERPT elasticity was 0.75 for products invoiced in the exporter’s currency, compared to about 0.19 for yen-invoiced products. We find the same tendency for imports from two Asian powerhouses: China and Thailand. There is no significant difference in the ERPT elasticity between products invoiced in the exporter’s currency and those invoiced in a third currency (i.e., a currency other than yen or the exporter’s currency). In addition, an asymmetric pass-through is found, namely the ERPT during the appreciation phase of the yen is higher than during the depreciation phase. This finding is interpreted that foreign exporters strengthen their pricing-to-market behavior during the yen depreciation phase to maintain their market share. |
| JEL: | F1 F31 F33 F39 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32910 |
| By: | Yusuf, Tayo |
| Abstract: | The study explores the circumvention of sanctions by Russia using the “Dark Fleet and Gray Fleet”. The research was premised on the rationale that the sanctions imposed by the USA and its allies has only not had its intended effects, studies shows that the Russian economy has weathered the storm and is on an upward trajectory. The study showed how the Russian state along with its collaborators have been able to enlist deficient tankers with obscured ownership to transport oil and fuel the ongoing war with Ukraine . The paper recommends ways by which the United States and its Western allies can collaborate to ensure sanctions are far reaching and fit for purpose. |
| Keywords: | Sanctions, Evasion, Dark Fleet, Gray Fleet, Russia, USA. Ukraine |
| JEL: | K00 Z00 |
| Date: | 2024–08–30 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121829 |